us in and thank you all for being here with me. inside politics with john king starts right now. welcome to inside politics it. we begin this hour with important breaking news. deep inside the west wing, we are told robert mueller's investigators interviewed john kelly. sources describing the questions as narrow as to context as to a deteriorating relationship with his boss, the president. he is set to leave the office in the coming days and sources tell us he is no longer on speak terms with the boss. let's focus on the special counsel part of the news. evan, what do we know about the special counsel's questions for john kelly.

what did robert mueller want for him? >> these were a narrow set of questions having to do with the obstruction of justice part of the investigation. they wanted to have kelly essentially corroborate testimony that they had already received from don mcgahn, the former white house counsel. there was an episode in the white house that said that the president had tried to get don mcgahn to order the firing of special counsel robert mueller. the president was angry about the news stories and wanted don mcgahn to refute the stories and he refused. kelly was witness to some of this. that's what the meat of this interview was about. especially for kelly to come in and corroborate what the special counsel already had from its own interviews and information as part of the obstruction investigation. >> for gets into a tricky constitution question.

the executive trprivilege. did they say it was great or did they push back? >> emmet floods, the white house counsel refuse and said this is off limits. they said that the special counsel is not allowed to definitely beyond the inauguration and one of the things they tried to do was to narrow the scope of the interview which is what ended up happening. especially emmet flood said you have to prove this is necessary and you have to prove you can't this information from anywhere else. that's what ended up happening. kelly went in and did this interview and it hasn't been back. >> hasn't been back since. stay with us and we will discuss it more. this news breaking on a day where john kelly's hours might be numbered. >> john kelly is expected to

resign in the coming days and leave the west wing after a tumultuous 17 months. he is only further out in the news today, not a place that the chief of staff likes to be. we are told that even though the president and john kelly had this up, down, back and forth relationship for sometime now and john kelly has been on the verge of being fired or resigning multiple times before, we are told this time is different because his relationship with the president has deteriorated so greatly that the two men are not on speaking terms. yes, they have been in the same room for some meetings and in the oval office, but not been speaking one on one and that's a sign of how bad things are and president trump realizes that and he is looking ahead to the next two year and it is democrats taking over the house in january and he wants to have someone in that position to help him shape the last two years of his first term and he doesn't feel that john kelly is the

person for the job. the chief of staff john kelly did not travel with him and he is not in his office in the west wing either. john? >> kaitlan collins at the white house that, sounds like the definition of dysfunction, not being on speaking terms with his boss, the president. as we continue the conversation, pam brown and michael zeldin at the justice department. let's come back to this. a lot of pieces and chat enjs in trying to cover the investigations. we will see memos filed about paul manafort. john kelly sits down as part of the obstruction investigation. john kelly has been good at giving us crumbs. it's hard to see the bakery, if you will. i want to stick with this for a second. they come to the president of the united states and the special counsel wants to

interview your chief of staff. let me start with you. the president has every right, whatever your politicses, to have a small group of people. how do you make the case as a prosecutor that i have the right to this information? >> they have the right to deliver to process privilege. if the communications are about policy matters that the chief of staff is providing, the president, that's the base for the executive privilege. if it's not that, it's not easily established. evan said something interesting. they resisted the testimony, but said we will give it to you if you can establish the two standards that it is necessary and you can get it from nobody else. apparently mueller satisfied that because they made kelly available. if mueller is able to meet that standard, one has to wonder why can't he make it if he hasn't

already as to anybody else he wants to interview. does that mean that down the line the president resists a subpoena for testimony and espy has been met and they get to ta uk to the president. >> espy a case of previous precedent in this matter. we are waiting to see key documents about paul manafort. the question there is, robert mueller said this guy got a plea deal and he lied to us. he said we know you are lying and he continued to lie. we don't know the lies about the pre-trump manafort world for lobbying and hiding know moy and the like or is it in trump land when he is chairman of the campaign. we don't know the answer to that. >> that are is the key question here, his lies according to mueller's team. having to do with the president and the trump campaign and any dealings with russia ordealings

with ukraine and russia. my colleague spoke today and said and we wanted that manafort was in contact with the president's lawyers and he told dana that in the days before, mueller's team believed he was lying on issues relating to the president as it pertained to the trump tower meeting and the president's knowledge of it. manafort denied that his son don, jr. was meeting with russians at trump tower. according to rudy juliany, that is snag mueller's team made clear. the question is, will that be in the court filings today. we know there were a lot of redactions that led to more questions than answers. we will see if we will gain a better understanding of the russia investigation and what he was lying about.

>> we will see what new materials we get here. michael cohen said they were all lying. the conversations about trump tower went on to at least june of the campaign year. everyone said they ended around january. he is becoming a more serious candidate and the narrative was iowa is about to vote. let's be a presidential candidate. can't do that and can't do that. now we find out according to michael cohen and documents it went on until at least june. this is alan dershowitz who is critical of the president. listen to him making the case that if that's all that happened, no big deal. >> collusion is not a crime and even if he was building a tower, what's the evidence that he gave anything in return for that. they are not crossing the line from what some people might regard as political sin to federal crime.

>> number one, is that right in the sense that if you are an active candidate for president and trying to build a trump tower and they need to get clear and saying we will give vladimir putin a $50 million penthouse on top of the trump tower, the broader point is, is paul manafort lying about the meet something why did they water that down in the convention? that's the dots mueller is yet to connect for us publicly. >> starting with the trump tower. if it was the case that anyone in the trump organization said to russian licensing authorities, if you give us the license to build this hour, we will give you a $50 million penthouse. that is text book practices act violation. it is illegal flat out. >> for anybody? >> correct. >> you don't have to be a candidate for president.

>> exactly. now with collusion not being a crime. it's not a crime except in the antitrust area. to deliver something of value and our conspiracy to interfere with the functioning of the federal election me is are both crimes. it f there is underlying evidence that the parties did either of those things, there is crime there. that's what mueller is mandated to investigate. >> tracking this cohen reporting, this is fascinatinfa. we are waiting for another filing today. what is the anticipation. >> the big headline is what recommendation robert mueller makes on how much jail time michael cohen should get. it's the context that should be news worthy. michael cohen is banking on his cooperation with various investigators to be his life line. his lawyers have tried to paint

this picture of a man who came around to his senses and is eager to cooperate to help them get to the truth on whapt and his dealings with president trump. as a part of that, they make the argument for michael cohen to get no jail time. two areas we are watching closely is whether we get any new insights from robert mueller on two areas where robert mueller has already pleaded guilty. it was back in august that michael cohen pleady guilty to two counts of campaign finance violations and as a part of that, he dropped a bomb chel in which he sa with two women who alleged to have affairs with donald trump and he also pleaded guilty to lying to congress about this moscow deal in which they were

having discussions about who weather to do a building project in moscow and michael cohen is saying the conversations were more extensive and went on for longer than he previously admitted. these are areas where we can get insight from robert mueller. from cohen's perspective, he is hoping that by pushing for the quicker sentencinging because he could have asked for this to be potentially delayed under a more traditional cooperation deal, he made it clear he want this is to go on as originally planned because he is very, very eager to move on with his life. >> everybody stay with us. a lot of pieces to put together when we learn new developments in the investigation. the president has a new choice to be attorney general who would oversee the special counsel investigation. we'll be right back.

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welcome back. the context of the new news about the special counsel investigation, the revolving door at the white house still revolving. president trump unveiling a new pick for attorney general, tapping william barr for jeff sessions fired by the president in early november. president trump said it's a new relationship, but he's a big fan of what he hopes will be his next attorney general. >> a terrific man. a terrific person. a brilliant man. i did not know him until recently when i went through the process of looking at people. he was my first choice from day one. respected by republicans and respected by democrats. i think it will go very quickly. i have seen good things about him when people thought it might be bill barr. >> he was attorney general under

george h. w. bush and served welcome to washington as robert mueller's boss at the justice department when mueller was leading the criminal decision. barr was reluctant to return to federal government service, but they pushed bar to accept if he was offered the job and it was good for the institution. he offered mixed reviews into the metaling into the election. it's a return of an old establishment figure, but a federalist society republican. someone who has sweeping views of presidential power. assuming he gets confirmed, relatively short order. if robert mueller said i want to subpoena the president of the united states, is barr someone who would say go ahead or the president can stop you? >> i think robert mueller will have a tough road to convince barr of the need for a subpoena. he is convincible, but he starts

with the fact that you don't need this unless you can demonstrate no other source of evidence in an ongoing criminal evidence. it's a nature of a conservative jurist as is barr. i don't know if that's a goods thing unless mueller has the evidence to convince him. he is a lawyer, not a politician. >> here's what he said in may. he was bob mueller's boss and knows him well. his appointment is good news. i am confident mueller will keep his eyes on the inquirey and not let him keep his eye on the sprawling witch hunt. here's what he said a month later to the hill newspaper. barr called the obstruction investigation aconine and warned that the risks taking on the look of a political operation to

overthrow the president. which is it? >> i think bill barr is like a lot of conservatives and nervous about where this is going. you are seeing that in the interviews he has given. i will tell you this. talking to conservative lawyers, they are thrilled about this. people inside the justice department and career people and appointees are relieved. inside the department right now, the dysfunction of having acting attorney general and a deputy attorney general who don't trust reach other. this is a fourth and fifth floor of this building where there is no trust right now. having bill barr come in, someone who is known, a known quantity to restore the department and its reputation has a relationship with the president. this is somebody who supported the president even though he is an establishment figure. they feel he will do wonders just to try to repair the relationship which has been

broken for many months. >> he is lobbying the announcement and the deputy attorney general. it is interesting in talking to trump's allies. they are not too happy about this thing. some of them at least. they feel like he is too much of an establishment figure and too aligned with bush and those views and they feel like he's someone who isn't aligned with the president. it will be interesting to see how this plays out. >> it's fascinating because he's not a trump person and the president is critical of jeff sessions. he is supposed to be his guy. he is supposed to be loyal and never should have recused himself and should have shut down the robert mueller investigation. that's what president trump thinks he is supposed to do. he came up through the ranks and knows what his job is supposed to be. you are a presidential appointee, but your fidelity is to the justice department and

the law, not to the president. mueller worked for him and he is about to be the legal count that worked for him. connect the dots for me. how does this work? >> welcome to washington. mueller was the assistant attorney general of the legal division and we reported up to the attorney general. it's a normal order of hierarchy within the differently justice. we did our job and worked closely with barr. he was a good attorney general to work with. i think he will approach the mueller investigation similarly. it is a case and he has to evaluate the facts. i discount his statements about there is not an obstruction case here. if mueller can say here's the evidence and let's talk about how we want to proceed, he will have a receptive audience.

he may not get his way, but it's not someone who will try to get this. >> not an automatic roadblock. he starts on monday. are we seeing an evolution? it's irresponsible and reckless and disrespect to the evolution. he picks an establishment guy, not a trumpy. he has no political loyalty to the president that we know of. he brings in a serious person. do we get the sense that it's like other policy matters. what the president says and what they are doing? >> the calculus is we want people in these positions who could have a good relationship with mueller, someone seen as a respectable figure. this is a big job coming in as white house counsel to deal with the expectation of subpoenas from house democrats. there is an expectation that

there was going to be oversight and he is viewed as someone who can deal with that. that's a couple dozen lawyers? >> maybe 30 lawyers. >> that will be a bigger team than under don mcgahn. not just the mueller probe, but the probes from the house from the democrats. >> it's a fascinating time. a lot of pieces are starting to move. everybody coming in with the breaking news. up next, new signs is of what the president calls the hottest job market on planet earth might be cooling a bit. from the very beginning, it was always our

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health care has been a steady performer for several years and that is a driver of the american economy. the president takes president for the manufacturing economy, adding 27,000 new jobs here. what's fascinating to watch are the wages. you want to see wages continue to move ahead and they started to percolate a bit, next month we will have to see if the hiring comes back or we are settling into a new zone. something that janet yellin warned about. with a job market this hot, you can't keep adding to it every month. >> with the numbers, joining me to discuss, the senior economic correspond ept with the "new york times," i want to read a tweet you wrote. i love when we turn the

economics into english. this is a goldie looks report. what do you mean by that? >> the federal reserve will raise rate it is too much and we might have an economy that slows because they keep raising interest rates on autos and home building. it slows down. this is a nice sweet spot. the market does not agree. the market is nervous about the future. >> put this into context. this is one jobs report, we should not go to vegas based on one jobs report, but it comes in the context. this has been a tough week. the president tweeting in the middle of this stuff. he believes despite the market

uncertainty that the president will have a breakthrough with china and this is his argument. >> china is at a point now that either has to change itself structurally and come into the world and be peaceful or it can continue what it's doing. if it continues, we have a president who is going to stand up to that for once and the american people should be appreciative of that. >> he was optimistic and said the president will stand up. is there evidence to back that up? >> markets are not optimistic. this administration really has a coherent plan that might lead to a deal that resets the relationship with china in a productive way. this happens eventually and we will see a lot of relief among ceos and investors. until had happens, this is an

erratic process. we see a tweet here and until that changes and there is concrete, we will keep seeing a lot of worry. >> when you see that worry, say you are a first term president getting ready to run for reelection, some people thinking the u.s. economy could tip into a recession. trump advisers. >> a 2020 nightmare. contrast to market fears. biggest worry for traders, they don't know why stocks are moving. is it a valid conversation that would tip into a recession? >> it's a worry with the expansion going on this long. you will hit 10 years next summer, hopefully. look at the things happening. the tax cuts fade as time goes on. the trade war has not escalated

until getting into the later part of this year. if this keeps escalating, that will hit things in 2019. those increases are starting to pinch. they are contributing to a rough 2019 or 2020. even as the data is strong. that's the weird disconnect. markets are predicting the future and getting worried as things look good today. >> appreciate your insights and context very much. appreciate it. >> thanks, john. >> before we go to break, george herbert walker bush's detail. final notification. timberwolves detail concluded at 0600 at the library at college station, texas. godspeed. he will be missed by all of us. we'll be right back.

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and accessoriesphones for your mobile phone. like this device to increase volume on your cell phone. - ( phone ringing ) - get details on this state program visit right now or call during business hours. . topping our political radar, a government shut down delayed and the president signing a resolution that keeps the government open for another two weeks. still big fights including over funding for the president's border wall. in new jersey, his club is accused of hiring illegal immigrants. a costa rican woman said she was

undocumented when she worked there in 2010 through 2013. the women said two supervisors at the club helped them to avoid detection to keep their jobs. from never nancy to pro pelosi. lynch was part of a brief to block pelosi from getting the votes he needs. he said he changed his mind after one of the best conversations he ever had with him. he is confident she will be speaker when they vote on the floor. dan mccready. state election officials investigating questionable witness signatures and other problems with the handling of absentee ballots in two counties. >> people deserve mark harris to tell us what he knew and when.

he was the only person who knew the extent of this activity and it's not acceptable for him to stay silent. there needs to be a new election. there is people in north carolina who had voices silence and their rights to vote taken. >> up next for us, president trump naming his pick for the next united nations ambassador. for fox news, the news hit close to home. >> we do know heather once had that job. >> that's right. i guess the career trajectory might prove.

welcome back. the president letting us know who he wants to succeed nikki haley in the united nations. here's the president saying this morning he would nominate her to be the next ambassador to the united nations.

>> she is very talent and very smart. very quick. i think she is going to be respected by all. heather nauert will be nominated for the ambassador to the united nations. >> nauert is a former host to fox news and has been the spokes woman for rex tillerson and the current secretary of state, mike pompeo. taking questions from the travel ban to the negotiations. it comes amid reports that secretary pompeo wants to downgrade the position and make it no longer a cabinet level. with me to share insights, "new york times." one of the questions will be, does she have the foreign policy experience to do this job? another question i have, i get it. ronald reagan elevated to cabinet level. both bushes took it down.

obama elevated it again. that's a president's choice. after this selection where the republicans get shellacked in the gender job, you name any woman and say up or downgrading it. >> it doesn't look good. there was an amazing picture from one of the recent meetings that the president had with president xi of china. every official on both of chinese and the u.s. side were all men. it was an incredible image and this is an opportunity to put a woman at the table. now, you can argue that her lack of real foreign policy experience might not warrant a cabinet level position. at the un, you are in the position to be talking to chinese officials and north korean officials. you have access to the information and you are really a

potentially power player. the question is, whether it down greats the position she had with trump. >> we're saw nikki haley on other issues as a big meeting. she was a powerful spokes woman for the administration. why do you downgrade or put someone with experience in the job unless it's secretary of state sitting in. that's his option if he chooses. >> one of the ways we will see the administration push back because of proximity with pompeo. she was there with the new york summit. they are going to be pushing back in that way, but your question is valid. nikki haley while she didn't have foreign policy experience, she was twice elected the governor of and diplomacy that goes into being the governor of the state. she is definitely going have to

answer questions about that. it may mean if this white house has a lower opinion of the united nations and they don't view the job as quite as important. that's significant and twice elected governor. it's certainly a contrast with heather nauert. >> you mentioned the broadcasting career and whether you think she has the experience to be the ambassador, she is a perfected spokesperson at the podium. the president watches a lot of television and he is impressed by this. >> i take issue with the tone of your question as though we don't care about this. i think we have been clear in our responsibility and let me finish, our concern about american who is are serving on behalf of the u.s. government and other countries. >> okay, okay. enough said. i will move on. where there is an earthquake in china, i get e-mails and calls from all of you asking was it

another nuclear test. that's how big of a deal this is that it's going to. let me finish, please. it is a big deal what is going on and it is a concern to the world, not just the united states. >> she is a good communicator, absolutely. that's a big part of the job. here's my question to the point of experience. does she have the stauture or is it just that they don't want someone of the stature to do this. this is governor turned ambassador, nikki haley. i have a different style of us getting there. he's the president. my job is to do what he needs me to do and for the most part he is willing to listen and come around. she talks in another interview about how she moved the president and said mr. president, the right destination, wrong route. we think the president does not

want someone like that. >> i think it's clear he doesn't. we should give her an opportunity if she gets the job and gets confirmed. she may well surprise us in terms of having a more forceful opinion of foreign policy herself. everything we know about her background and what the president wants is that he doesn't want somebody pushing back against his idea of what

america first means. he put people in like mike pompeo who agree with him, like john bolton who agree with him. what we have to assume is that he is putting heather nauert there to be an effective spokesperson and channeler of his own view at the united nations which does under state the that position often does have in terms of actually doing the tough work of diplomatic negotiations with really tough adversaries around the world. now a lot of the questions at the confirmation hearing is can she do that work. >> nikki haley is not afraid to stand up. she said no, i don't get confused. i wonder if her successor will have a similar action. we will see where it goes. >> up next, elizabeth warren snubbed from the hometown newspaper. what would you like the power to do? ♪ ♪ i can do more to lower my a1c. because my body can still make its own insulin. and i take trulicity once a week to activate my body to release it, like it's supposed to. trulicity is not insulin. it comes in a once-weekly, truly easy-to-use pen.

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the calendar says 2018, but it's never too early to talk about the election. a change of heart about the presidential prospects.

writing warren missed her moment in 2016 and there is reason to be skeptical of her perspective candidacy in 2020. while warren is an impactful senator, she is a divicive figure, a unifying voice is what the country needs after the polarizing politics of donald trump. in 2015 the globe urged warren to take a presidential run. she decided to release a video do you meaning her decision to take a dna test to prove her ancestry. it resulted in mockery is the right and criticism from liberals. >> it matters. they encouraged her to get involved in the last presidential election. it makes a difference to have this change of heard. he was in a bind with the dna test. if you don't do it, you are john

kerry. you get swift boated. if you do respond, you are playing into president trump's hands. i don't think she had an easy question. the lesson here is never wait if you want to run for president. >> that's a big lesson. >> beto o'rourke right now is young, lost his senate race, but there is a definite energy around him and democrats say you don't know if that same energy and enthusiasm will be there if you wait four or eight years. you have to take the chance when it comes up. >> ask barack obama. senate democrats for the wait. you might have to wait eight years. should she have done the dna test. remember little marco rubio. you can't outtrump trump. after you set your hair on fire, you have to keep adding gasoline to your head. that's not a normal reaction.

we know marco rubio did start going after trump all the time and he didn't want to keep pouring the gas. >> there is no bottom. he will go lower and lower and other politicians will take a step back. the criticism of elizabeth warren that she played into his hands was widespread. the hitting back at this moment. you end up punching yourself in the face and trump keeps on being trump. >> if there is one thing we learned from trump's candidacy, never count somebody out because of a political reality that we all grew up with and that is discarded. is she damaged because of what happened? yes, but i do think we are so early in the process. there ways that somebody like her can get past this. there is going to be a huge field of democrats. >> giant field and she has a national name and a national

following. she can recover because everybody falls, but it's about how you get up. there is a lot of breaking news. hope to see you back here sunday morning at 8:00 a.m. eastern. brianna keilar starts right now. have a great day. i'm brianna keilar live from washington headquarters. under way, we begin with breaking news and what was already shaping up to be an extraordinary day in the russia investigation. cnn learned that robert mueller questioned white house chief of staff johnicly e y injohn kelly ranking white house official known to provid information in the russia investigation. the questions to kelly focused on potential obstruction of justice. this comes as kelly is poised